Correlation Between Saia and Horizon Space
Can any of the company-specific risk be diversified away by investing in both Saia and Horizon Space at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Saia and Horizon Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saia Inc and Horizon Space Acquisition, you can compare the effects of market volatilities on Saia and Horizon Space and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Saia with a short position of Horizon Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saia and Horizon Space.
Diversification Opportunities for Saia and Horizon Space
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Saia and Horizon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Horizon Space Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Space Acquisition and Saia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Saia Inc are associated (or correlated) with Horizon Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Space Acquisition has no effect on the direction of Saia i.e., Saia and Horizon Space go up and down completely randomly.
Pair Corralation between Saia and Horizon Space
Given the investment horizon of 90 days Saia is expected to generate 25.11 times less return on investment than Horizon Space. But when comparing it to its historical volatility, Saia Inc is 9.48 times less risky than Horizon Space. It trades about 0.04 of its potential returns per unit of risk. Horizon Space Acquisition is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2.20 in Horizon Space Acquisition on September 14, 2024 and sell it today you would lose (0.69) from holding Horizon Space Acquisition or give up 31.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.92% |
| Values | Daily Returns |
Saia Inc vs. Horizon Space Acquisition
Performance |
| Timeline |
| Saia Inc |
| Horizon Space Acquisition |
Saia and Horizon Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saia and Horizon Space
The main advantage of trading using opposite Saia and Horizon Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia position performs unexpectedly, Horizon Space can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Horizon Space will offset losses from the drop in Horizon Space's long position.The idea behind Saia Inc and Horizon Space Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Horizon Space vs. Keurig Dr Pepper | Horizon Space vs. Commonwealth Bank of | Horizon Space vs. Siriuspoint | Horizon Space vs. Boston Beer |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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